Opposition to Kazatomprom Westinghouse Deal

by Nathan Hamm on 7/24/2007 · 1 comment

kazatomprom.jpgJames Love’s Knowledge Ecology International with Essential Action, Greenpeace, and the Nuclear Information and Resource Service have sent a letter (the letter itself — PDF) to the Committee on Foreign Investment in the United States asking them to reject KazAtomProm’s attempt to buy a 10% stake in Westinghouse from Toshiba. The deal would reportedly require the transfer of uranium processing technology from Toshiba and Westinghouse to the Kazakh company. As Financial Times reports,

Toshiba, which took control of Westinghouse last year, hopes to use the share sale to Kazatomprom to improve its access to uranium supplies, an increasingly important factor in Westinghouse’s ability to win contracts to build nuclear power stations.

And as for why Kazatomprom wants the technology, the company wants to be a stronger international player, involved in all aspects of nuclear power generation. There are some other benefits as well.

Kazakhstan hopes to use U.S. technologies to stop uranium ore exports to Russia and to sell high value-added products instead, namely, heat assemblies made according to Western standards.

That’s about enough to sell me on the deal right there. But Love and Co. aren’t having it, and they would have you believe that to sell a stake of Westinghouse to Kazakhstan would be a grave mistake. The objections they make are essentially identical to those I highlighted a week ago. And in his statement on the letter sent to CFIUS, Love again uses his own ignorance of Kazakhstan as the reason why this deal must be opposed.

Love’s primary claim is that Kazakhstan’s government is too repressive to be trusted with US uranium-processing technology. He repeats variations on that theme quite a bit, though he does seem to realize that Kazakhstan’s political system is beside the point, because what CFIUS should be concerned with is nuclear proliferation and potential threats to US security. So,

Kazakhstan’s acquisition of Westinghouse’s nuclear technology will present risks to the world community, should the technologies be used by parties who are seeking to develop nuclear weapons.

And in this letter, Love acknowledges that Kazakhstan has a stellar record on nonproliferation and gives Nazarbaev’s government credit for giving up its nuclear arsenal after independence. But he dismisses that record. Why? Because Kazakhstan’s government is repressive. Thankfully he does not insult the CFIUS’s intelligence, and he extends the argument by claiming that because of its track record, one must question the stability and legitimacy of Kazakhstan’s government.

The long-term stability of the current regime cannot be assured. An unexpected coup, a health problem for President Nazarbayev, or another unforeseen event could radically change the political climate in Kazakhstan.

And if that don’t make you soil your drawers, he points out that there have been investigations into Kazakhstanis involved in black market nuclear sales. (He leaves for the notes section the perhaps relevant datum that Kazakhstan’s government did the investigating, implying its interest in not permitting such activities.)

In closing, they say the following.

The Committee on Foreign Investment in the United States (CFIUS) should not permit foreign investments that increase the risk that nuclear technologies will ever be used for military purposes, including, but not limited to, uses against the United States. The CFIUS should not sanction investments that will predictably result in nuclear technologies being transferred to a country that has never witnessed a peaceful transition of political power, which has never held fair and free elections, and which cannot claim to represent long-term legitimacy, in a region fraught with instability and conflict.

The letter to CFIUS is just a smarter version of a dumb argument — Love and Co.’s very own version of the Dubai Ports fiasco. What bothers me most about the whole deal is that Love and his allies flaunt their ignorance of Kazakhstan to tap into others’ ignorance, yielding an insulting set of claims that boils down to “Muslims are a bit too iffy to trust.” What is especially ironic about this is that it’s coming from the left, from which one more often finds criticism of the right for the same behavior.

Love shows off his ignorance of Kazakhstan not only in his earlier writing on this subject, but also on KEI’s website.

We have no real understanding of how the Kazakhstan political system will evolve.

What it really should say is that James Love has no real understanding of how the Kazakhstani political system will evolve. And that shouldn’t surprise anyone because this is a guy who characterizes the country as being “accessible to Al Qaeda,” and being “in a region fraught with instability and conflict.” That instability and conflict is neatly concentrated further to the south, and the “Al Qaeda accessible” comment only shows that Love thinks all Muslims are but a step away from jihad. And we can be sure that’s what he really means because he cites the Iranian revolution as a credible model for what the collapse of Nazarbaev’s government would look like.

Contrary to his claims, Nazarbaev enjoys quite a bit of legitimacy. After all, Western human rights activists are not part of his constituency. And even if the wise Mr. Love doesn’t know much about Kazakhstani politics, there are plenty of folks out there who do. Though there are plenty of potential scenarios for a collapse of Nazarbaev’s government, I’m sure that most would agree that the most likely source of opposition will come from within the elite, which, last time I checked, is rather light on islamists. The most likely risk to US security stemming from a collapse of Nazarbaev’s government would be a more Russia-friendly government selling the technology to Moscow. And I think they’ve got a handle on this stuff.

And by the by, if KEI and Co. are so concerned about transfers of technology to potential enemies, why does this not bother them? Is it because China’s not Muslim or because there are no links between Dick Cheney and top Chinese officials?

It would be a shame if CFIUS blocked the deal. Kazakhstan has been responsible with nuclear technology. And because it will become a more important player in nuclear energy with or without links to the US, I would much rather that Kazatomprom have ties to US companies than not. Further, this deal is good for strategic reasons. It will increase Kazakhstan’s independence from Russia and its potential as an energy exporter, helping to further establish the emergence of another center of power between Moscow and Beijing in Central Eurasia. The deal will also help an important ally, Japan, meet its energy needs. Also importantly, letting the deal go forward shows US confidence in Kazakhstan. That itself may not be terribly crucial, but to block the deal for the reasons James Love cites sends another message of US distrust for Central Asian and Muslim governments. Concerns about the lack of democratic bona fides and the human rights record of the Kazakhstani government are valid, but they are not relevant to this aspect of US-Kazakhstan relations. Kazakhstan’s government is fairly stable, and it enjoys popular support. Though many, including myself, have questioned the direction that the government is moving, the prospects for Kazakhstan are fairly bright, and I think it is well on the path to emerging as a success.

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– author of 2991 posts on 17_PersonNotFound.

Nathan is the founder and Principal Analyst for Registan, which he launched in 2003. He was a Peace Corps Volunteer in Uzbekistan 2000-2001 and received his MA in Central Asian Studies from the University of Washington in 2007. Since 2007, he has worked full-time as an analyst, consulting with private and government clients on Central Asian affairs, specializing in how socio-cultural and political factors shape risks and opportunities and how organizations can adjust their strategic and operational plans to account for these variables. More information on Registan's services can be found here, and Nathan can be contacted via Twitter or email.

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{ 1 comment }

cgb July 24, 2007 at 4:37 pm

Nice work.

Westinghouse inked deals to make nuclear power in eastern china. The economic implications are obvious, if unstated.

It’s cheaper to process your own uranium in-house just across the border in Kazakhstan.

Big fat duh!

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